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Fulfilling orders for steel plates from existing inventory

Author

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  • P A Huegler

    (Lock Haven University, Clearfield)

  • J C Hartman

    (Lehigh University, Bethlehem)

Abstract

This paper investigates the steel plate order fulfilment problem from existing inventory, which is a generalization of one-dimensional cutting and packing problems. Semi-processed inventory of steel slabs can be burned, heated, rolled, and sheared to meet customer order requirements. This problem is an integral part of the day-to-day operations of steel plate manufacturing. A 0–1 integer programming formulation is presented and two heuristics, based on single-order formulations, are presented to quickly generate lower and upper bounds. The bounds are improved using Lagrangian relaxation and subgradient optimization, producing average optimality gaps of 2.12% on 17 real-world data sets. The upper bound improvements represent actual savings over the current solution method of 1.94%, or an average of about $230 000 over a 3-week period. An economic interpretation of the Lagrange multipliers is also discussed and shown to be useful for handling rush orders.

Suggested Citation

  • P A Huegler & J C Hartman, 2007. "Fulfilling orders for steel plates from existing inventory," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 58(9), pages 1156-1166, September.
    • Handle: RePEc:pal:jorsoc:v:58:y:2007:i:9:d:10.1057_palgrave.jors.2602274
    DOI: 10.1057/palgrave.jors.2602274
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    References listed on IDEAS

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    Cited by:

    1. Morikawa, Katsumi & Takahashi, Katsuhiko & Hirotani, Daisuke, 2014. "Make-to-stock policies for a multistage serial system under a make-to-order production environment," International Journal of Production Economics, Elsevier, vol. 147(PA), pages 30-37.

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